USDCHF drifted further after the SNB decision, down to 0.9116
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Swiss National Bank has recently decided on the interest rate choosing a 50bp variant. Andria Pichdi from HF Markets comments on the decision.
FXMAG.COM: Could you please comment on the SNB decision after it's made? What's ahead of USD/CHF?
Andria Pichdi (HF Markets): Having in mind the recent Credit Suisse events, the SNB went ahead with the 50 bp rate hike that had been expected, in order to counter "the renewed increase in inflationary pressure" as they stated. So the 50 bp was well justified considering the events of the past 2 weeks and the potential aftermaths of the Credit Suisse takeover and the AT1 bonds rescue on inflation and the economy in general. USDCHF drifted further after the SNB decision, down to 0.9116.
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Key support level for USDCHF remains the 1-year support area, i.e. 0.9050-0.9100
Andria Pichdi (HF Markets): Considering that it’s too early to claim that the banking crisis is over, that inflation is now expected at 2.6% (was 2.4%), and still at 2.0% (was 1.8%) in 2023, that economic activity is expected to remain subdued, and that vulnerabilities on the mortgage and real estate markets will persist, further tightening is expected, something that could increase further the bearish bias in the USDCHF. Key support level for USDCHF remains the 1-year support area, i.e. 0.9050-0.9100. A dive below that area could endorse the bearish structure to 2021 and 2020 lows at 0.8900 and the 0.8760 barrier. A resilience of USDCHF however above 0.9050-0.9100 cannot be interpreted as a bullish signal, as the asset remains well below the 50- and 200-week SMA.
